In a letter to Senator Chuck Grassley (R-Iowa), acting GAO head
Gene Dodaro cited several instances in which the State Department, the
FBI, the Department of Defense (DoD) the Department of Justice (DOJ),
and the White House have stonewalled the agency's investigative efforts. As reported by The Hill:

Popular music has the Grammys, pro wrestling has the Slammies, and Bay Area Music magazine used to honor the California music scene with the Bammies.

So when the Department of Justice makes its annual announcement of how much money the government recovered in False Claims Act cases, POGO thinks the occasion should be celebrated with a special award:

The Qui Tammies.

Qui tam (pronounced "key tam") is the name
given to False Claims Act lawsuits filed by private persons on behalf
of the United States alleging fraud in a wide variety of federally
funded programs: Medicare and Medicaid, defense programs, federally
insured mortgage and other federal housing programs, disaster relief
loans, and agricultural subsidies. The Qui Tammy award statuette should
be a carved figure of Abraham Lincoln since the False Claims Act is
also called the “Lincoln Law.” It was enacted during the Civil War to
deal with unscrupulous defense contractors who sold defective equipment
to the Union Army.

Last week, Justice announced
the federal government recovered $2.4 billion in settlements and
judgments in cases involving fraud against the government in fiscal
year 2009. (According to Taxpayers Against Fraud (TAF),
the total is actually much higher because Justice does not include
recoveries in criminal False Claims Act cases or settlement money
distributed to the states, which accounts for about 45 percent of all
money collected in Medicaid fraud cases. TAF claims the true total
amount of recoveries by the government this past year is more than $5.6 billion.)

Justice claims that total recoveries since 1986, when Congress
substantially strengthened the False Claims Act, now stand at more
than $24 billion. Not too shabby.

This week, Sen. Claire McCaskill (D-MO) re-introduced the “Lieutenant Colonel Dominic ‘Rocky’ Baragona Justice for American Heroes Harmed by Contractors Act”.
The bill would require foreign companies that have contracts with the
federal government outside the U.S. to agree to be bound by U.S. court
jurisdiction in certain civil lawsuits brought by U.S. service members,
government employees and U.S. contractor employees who claim they were
harmed as a result of the contractors’ (or subcontractors’) performance
of those contracts, as well as in all civil and criminal actions
brought by the United States alleging contractor misconduct. The bill
would also give officials the authority to suspend or debar contractors
that evade service of process or fail to appear in court.

While the previous version of the bill only covered lawsuits
alleging “serious bodily injuries,” the new bill also covers civil
actions “alleging a rape or sexual assault.” This addition was most
likely prompted by the recent firestorm over the passage of Minnesota Senator Al Franken’s defense authorization bill amendment that prohibits the awarding of contracts to companies
that prevent their employees from taking workplace sexual assault cases
to court. Unfortunately, the new version of the bill is not
retroactive, which effectively shuts the courthouse doors on people
who, like Rocky Baragona’s family, have already filed lawsuits.

“While I support the overall substance of the legislation,” testified DoD procurement deputy director Richard Ginman,
“I believe there are portions that could be improved,” including
changing the language so that only the actions of prime contractors are
covered and existing contracts would not have to be modified.

Rocky Baragona’s family has filed an appeal of the dismissal of their lawsuit. Rocky’s father Dominic also testified at Wednesday’s hearing. He concluded with these words:

We get renewed energy from the bill being named in our son’s honor.
Even though we know this bill would not help our case, since it is not
retroactive, we know the passage would level the playing field between
domestic and foreign contractors. This bill will not bring us justice
or peace. But it will ensure that no family of an American soldier will
ever have to go through the hell that we have endured for over six
years, thanks to KGL’s inhuman silence.

The vote on the final passage of the financial regulatory package to which the Paul-Grayson amendment is attached has been delayed until after Thanksgiving. Nonetheless, yesterday’s vote signals a defeat for Rep. Mel Watt (D-NC), who had introduced an alternative amendment that would have limited the scope of the GAO’s audits.

We will continue to monitor this important bill as it makes it way through Congress. In the meantime, however, we wanted to highlight an insightful observation made by one of our blog commenters, who points out that the GAO may not have the staffing and resources it needs to conduct these audits:

GAO currently has right around 3000 employees. Attrition is currently about 10% a year, with at least 330 people planning to leave in the next two years for sure (Based on a voluntary survey of all GAO employees of which 2220 participated.) Along with the other additional work GAO has been tasked with, with respect to the TARP, GAO is currently overwhelmed. GAO's audits, controls, and processes mean that on average each report takes 9 months to complete. The TARP legislation asks for a 60 day turn around, which is really way too fast. People are burning out, and I am not sure that asking GAO to audit the FED will do anything but overwhelm the system further.

One agency cannot be responsible for all of our good government. We need to either:1. Expand GAO drastically,2. Make the IGs more robust, and/or3. Congress and the public will have to understand that GAO's work will not be as reliable as it has been in the past.

We hope Congress takes this message to heart before deciding to task the GAO with even more work.

Nov 19, 2009

Today, the Government Accountability Office (GAO) released a report
documenting lax oversight controls and fraud related to
Service-Disabled Veteran-Owned Small Business (SDVOSB) and
Veteran-Owned Small Businesses (VOSB) contracts. The GAO report was
released at a hearing before the House Committee on Small Business held by Chairwoman Nydia Velazquez.

GAO’s review found:

1.
Ineligible firms improperly received approximately $100 million in
SDVOSB contracts and an additional $300 million in contracts set-aside
for other small businesses. Some of those contractors were not even
eligible for the SDVOSB program. Because there are no penalties for
improper contract awards, many of those contractors were allowed to
continue their work.

2. The Small Business Association (SBA) and awarding agencies
lack “effective fraud-prevention controls” and “neither the SBA, except
when responding to a protest, nor contracting officials are currently
verifying the eligibility of firms claiming to be SDVOSBs.”

A recently sustained bid protest from the Government Accountability Office (GAO)
found that a contractor did indeed get an unfair competitive advantage
when they hired a former government employee to prepare their proposal
and failed to disclose the information to the contracting official. The
allegations were brought forward by Health Net Federal Services in a
protest of the award of a recent TRICARE (which provides civilian health benefits for military personnel,
military retirees, and their dependents, and some members of the
Reserve Component) contract to Aetna Government
Health Plans (AGHP), who hired the TRICARE Management Activity's (TMA)
Chief of Staff to prepare their proposal.

The GAO's decision demonstrates the proverbial problem that an
ethics tree can only be heard falling in the forest if you tell the contracting
officer about the advice you received. Defending the award, AGHP told
the GAO that TRICARE Management Activity's ethics advisor provided the
former official with several "clean letters," including permission to
work on the bid proposal. But actually reading the letters, the GAO
found that the advice of the ethics official was ignored. The
official advised them to contact the contracting official with any
concerns they had. AGHP never did, which meant that the official wasn't
"clean" at all, says the GAO:

One source submitted comments on the interim rule. That source supported the rule and its objectives, but recommended that the central database/repository for retention of written ethics opinions, required by section 847(b), be made publicly available. DoD has not adopted this recommendation, as section 847 does not authorize access to the database by the general public.

I don't recall, however, that Congress expressly denied public
access to data – the law merely states that DoD create an ethics
opinion database. Actually, I held hope that the Obama Administration's focus
on openness,
transparency,
good
contracting, and eliminating special
interest clout in government decisions would rule the day, and that the
people would triumph.

Maybe Obama’s lofty goals haven’t trickled down to all parts
of the government, but what’s the harm in seeing a list of former government
officials who are now working for defense contractors? We have campaign finance
and lobbying disclosure – why not expose those circulating between the public
and private sectors who might be a driving force behind government decisions
and policies? Wait, I just answered my own question.

POGO investigators have learned that the saga of the fire sprinkler
system that won’t work in a fire is but the tip of the iceberg at Los
Alamos National Laboratory's (LANL) TA-55 plutonium facility.

It
turns out that about 2 years ago, there were roughly 300 modifications
to safety systems needed to protect workers and the public at TA-55
that were part of “design change packages,” or DCPs, that were never
closed out. What this means is that the safety systems were modified,
but were never verified as working after the modification.

Now,
about 2 years later, the number of DCPs that have not been closed out
has grown to around 600. One such system, the fire system, turns out
to be one of the systems for which DCPs are not closed out and which
was recently found not to be working. It is not too much of a
stretch to assume that other safety systems necessary to protect the
workers and public with open DCPs are also not working.

There
is no incentive for LANL to verify that these safety systems are
working because it is not part of the contract incentives (there is no
money to be made). The local Department of Energy (DOE) government
oversight has evidently not been doing its job for over 15 years since
1994 (which is when the open DCPs on safety systems date back to). The
so-called Facility Representative program is a program where DOE
federal personnel are supposed to be in the LANL facilities on a daily
basis checking for, among other things, fraud, waste, abuse, and safety
system operability.

According to our sources, some personnel
at LANL have tried to bring this potentially dangerous safety issue to
LANL management attention and have been ignored. It would take money
from the LANL operating budget to ensure that safety issues like this
are closed and this is evidently not a budgetary priority for LANL
or DOE. Evidently, safety systems potentially not working — which are
necessary to protect the public — is another “acceptable risk,”
apparently like the 3000 rem radiation dose that the public could be
exposed to in the event of an earthquake and fire in which the sprinkler system would not work.

Rather
than doing the job that LANL and DOE is paid for, management at LANL
has discussed just throwing out the older DCPs which date back more
than 15 years to 1994. It is not clear to POGO why DOE oversight
management and LANL management is being paid for this unsurpassed level
of incompetence. The Local DOE Site Office manager is a senior SES for
which the top salary is about $172K and the LANL Director makes over $800K. It is unclear why this facility is operating if the safety systems are not known to be working with certainty.

POGO has obtained an email exchange detailing the situation, which can be viewed here.